US stock indices closed mixed on Friday, with semiconductor and AI-related shares recovering part of the previous session’s heavy losses. The Nasdaq Composite rose 1.09 percent, while the Dow Jones Industrial Average fell 0.46 percent. The S&P 500 gained 0.31 percent and the Russell 2000 rose 0.94 percent.
The VIX volatility index fell 8.84 percent. Nvidia shares rose about 5 percent. Thursday’s sell-off had been the Nasdaq’s largest one-day drop in 19 months, and Nvidia had its largest one-day decline since January 2025.
Regulation fears behind the sell-off
Thursday’s decline was linked to concerns that a Democrat-controlled Congress could push for stricter AI regulation after the party’s midterm election win. Texas governor-elect Gina Hinojosa called for an immediate halt to data center construction.
Market participants also weighed strong US jobs data. Nonfarm payrolls rose more than expected in October and unemployment fell to 4.1 percent. Some traders feared a Fed rate hike could follow.
Strategists weigh the outlook
Joe Saluzzi, co-head of equity trading at Themis Trading, said strong data would normally point to a more hawkish Fed. Given Thursday’s moves and the sharp rise in volatility, he questioned whether the central bank would want to raise rates with the market on edge.
Kazuki Sawamura, a strategist at Shinkin Asset Management, said it was too early to tell whether the AI-driven bull market had ended. The key question, he said, was whether the declines would stay confined to sentiment or feed into lower corporate profits.
Greg Taylor, investment director at PenderFund Capital Management, compared the moves to 2008 or 2001, noting that the market had become concentrated around one theme. Susannah Streeter, chief investment strategist at Wealth Club, said volatility was likely to persist at least until January.
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